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Daimler subsidiary, Mercedes Benz production unit in Pune
© 2008 Daimler AG
Germanyís Daimler, India's Hero form joint venture

April 01, 2008

Germany’s Daimler AG has got a nod from the Indian Government to invest €261 million in the country through a joint venture with the Hero group.

India’s Foreign Investment Promotion Board (FIPB) and the Cabinet Committee on Economic Affairs (CCEA) both approved the establishment of Daimler Hero Motors Corporation Ltd in the first quarter of 2008. The closing for the foundation of the joint venture will be completed by the end of April.

The German auto major will hold a 60 per cent stake in the venture that will design, manufacture and sell commercial vehicles of over two tonnes, an official statement from the Indian cabinet said. These vehicles will sell initially in the domestic market and later overseas.

“The joint venture will also be sourcing components from India for Daimler’s global requirements. It would also undertake research and development activity for new products and variants,” the statement added.

Andreas Renschler, member of the Daimler Board of Management and Head of Daimler Trucks, said in a statement on the company’s website: “The approval process of the Indian authorities has been exemplary. We are looking forward to the implementation phase of our German-Indian joint venture, Daimler Hero Motors Corporation.”

The statement also added that the projected is initially aimed at the local production of light, medium, and heavy-duty commercial vehicles for the Indian volume market. The vehicles produced will be variants of Daimler Trucks’ existing product portfolio that are tailored to the Indian market.

The joint venture will provide Daimler Trucks with three benefits: essential market access, a base for penetrating further growth markets in the region, as well as a cost level and infrastructure that will enable competitive production. For Daimler Trucks, India will therefore be sales market, production location and export hub, all in one.

Daimler Trucks is a division of Daimler AG and has five major truck brands – Mercedes-Benz, Freightliner, Sterling, Western Star and Mitsubishi Fuso. At present, Daimler has a subsidiary, Mercedes Benz India Pvt Ltd, which manufactures buses and trucks. While announcing the signing of the deal in December 2007, the company had said that the local manufacturing operations for special applications of Mercedes-Benz trucks and bus bodies would continue for the time being at its Indian subsidiary that currently manufactures Mercedes-Benz Actros trucks in Pune.



by Sakshi Arora
© German Information Centre New Delhi
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